On Wednesday, markets opened near flat and drifted lower throughout the morning session.
- “Inflation remains far too high”
- But “October inflation data … showed a welcome surprise”
- He warned the Fed’s “monetary policy” can cause “uncertain lags.”
- He concluded that “moderating … rate increases may come as soon as the December meeting.”
It was everything the market hoped to hear and more. Markets ripped higher and closed at their session highs.
- Dow Jones +2.2% (Exiting bear market)
- Nasdaq +4.4%
- S&P 500 +3.1% (Major Breakout — see technicals)
- Russell 2000 +2.7%
Another notable development, annualized Q3 GDP was revised higher from 2.6% to 2.9%. This reading indicates that the U.S. may not be heading for a recession.
Markets ended November with a second month of gains.
Sector Round Up
All 11 sectors ended the day green.
Leading the charge…
- Technology (XLK) +5.0%
- Communications (XLC) +4.2%
- Consumer Discretionary (XLY) +3.5%
At the bottom…
- Energy (XLE) +0.5%
- Industrials (XLI) +1.7%
- Financials (XLF) +1.7%
Bitcoin^ joined in the rally as well. This morning it’s trading near $17,200.
- Its highest level in about two weeks
- About a 10% gain from last month’s lows
The S&P 500 smashed through its 200-day moving average…
This critical level acted as resistance in April and August. Yesterday’s closed showed significant momentum behind the bulls.
Our signals generally align with the bulls…
- The VIX fell back to last week’s lows
- RSI levels are all neutral
- The Put-to-Call Ratio is noticeably oversold…
The oversold conditions could be setting up a squeeze.
We remain long both SPXL & TQQQ to capture the seasonal momentum. Both positions show significant gains, 31% and 22%, respectively.
While Powell’s remarks boosted the market, we still have a ton of inflation data to get through before the new interest rate is released.
- Reference the December outlook for additional info.
Over the next two days, we’ll get an update on the labor market.
- This morning the latest unemployment filings drop at 8:30.
- Tomorrow we’ll get the November Jobs report at the same time.
*USEA support at $3
*BBW support at $22
*NINE support $10
*UCL support at $3.50
TITN on watch
AVDL support at $9
PDSB resistance at $9, support at $8
SCPH support at $7
AXSM support at $70
AVDL support at $9
PBYI support at $4
WNC support at $24, resistance at $26
RCUS support at $31
^MANU resistance at $23
^CROX support at $100
^RYAM support at $7, resistance at $8
CPRX support at $16
GEO support at $10.50
ADMA support at $3
MNSO support at $11
TME on watch
GILD support at $86